UK taxpayers warned over wrong address problems

Hundreds of thousands of taxpayers who have moved home over the past few years could miss out on a tax rebate worth £100s because HM Revenue & Customs has their address wrong, it is claimed.

The Government department is sending crucial pieces of paperwork to the wrong property in many cases, despite the correct information often appearing on correspondence it receives from employers, according to MoneySavingExpert.com.

HMRC is in the process of sending 5.7 million letters to employees charged the wrong amount of tax via the Pay As You Earn system during the previous two financial years, following a government computer glitch. Most, some 4.3 million, are due a refund.

One taxpayer, David Williams, from Newcastle, only got his £500 rebate because he knew his former landlord who forwarded his mail.

A further 1.4 million will have to pay back an average of £1,400 each. Those who owe large sums of money may be hit with punitive charges if they fail to pay on time, though HMRC says it may be lenient where taxpayers have not got their letter.

Anyone who owes under £2,000 will have the cash taken via their pay packet from April. Yet if they haven't received the letter, they could be in for a nasty surprise next spring.

‘The sheer scale of the tax code blunder is monumental. Over five million errors have been found already and there are millions more suspected. Even at a conservative estimate, if 5% of people have changed house without telling the Revenue in the last couple of years that would mean 285,000 missing out on refunds or being told they owe money,’ said Martin Lewis of MoneySavingExpert.

‘I’d urge everyone to urgently do two things: first, check your tax code to find out if you're due money back or you owe money. Secondly, if you’ve moved recently, double check the Revenue has your new home address,’ he added.

HMRC stresses it is employees' responsibility to update their address. Unless taxpayers inform it, the department will only change an address where it receives a P46 form (sent by a new employer when an employee, who does not have a P45 from their former company, starts a new job).

Those who fill out a self assessment form are unaffected by the computer blunder.